Tampa Foreclosures, Short Sales Dependent on Lenders Approval
Articles, business or finance February 6th, 2010
Tampa short sales could occur for several reasons: the homeowner could be in a hurry to sell the property because of financial difficulties; the property is valued at less than the outstanding balance owed by the property owner or the homeowner wants to avoid a foreclosure to help salvage some of their credit with the lending institution.
A short sale could help a new family or individual who are first time home buyers because the asking price for the piece of property is typically pretty low. However a family wanting to purchase a short sale property must first have the approval of the lending company that holds the mortgage, and they must realize this process take a considerable longer period of time than traditional sales. This last point is important if the family is trying to take advantage of the upcoming government tax credit which states there must be a contract in place by May and a closing date of April 30, 2010 in order to receive either of the tax credits – $8,000 for a new home buyer and $6,500 for an existing home buyer.
But how does a short sale help a bank or the mortgage company? A lending intuition might consider accepting a short sale contract, which is considerably less than what is owed on the loan balance, because the homeowners are probably facing Tampa foreclosures and for a bank, foreclosures are expensive and time consuming. In a foreclosure situation, a property is placed up for auction and this type of sale hardly ever covers the cost of the full mortgage either.
A homeowner who puts their house up for sale or is listing their property on a short sale needs to realize that the lending company could still proceed with a foreclosure. There is a federal rule, although it is not a mandated or enforced rule, which has federally insured lenders banned from foreclosure proceedings if a house is under contract. It is always a good idea to get written confirmation from the lending company that they will not foreclose on the property while there is a contract in place and keep in contact with their legal department for updates.
